Capital Gains Tax for Real Property: Why is this tax system so complicated?

Publisher:
AsRES2016
Publication Type:
Conference Proceeding
Citation:
http://www.asres.net/Index.html, 2015, http://www.asres.net/2015_Conference/Program.html
Issue Date:
2015-12-14
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In Australia, a Capital Gain calculation is applicable on the disposal of real property. However, there are some specific exemptions, such as the family principle place of residence, and rollover provisions. The Australian Taxation Office has identified taxpayers’ compliance with capital gain obligations as a significant risk. For instance, taxpayers incorrectly categorising or calculating their capital gain. Interestingly, prior to 1999 only one method for calculating capital gain existed, and yet now with our “simplified tax system” there are 3 different methods available. Since 1999 with the release of the Ralph Report and more recently the Henry Tax Review (2010), various recommendations were proposed to improve this section of the taxation system. It is argued that the complexity of the capital gain calculations, particularly with the infrequency of transactions which occur over long periods of time, and compounded with complex transactions, has contributed to the taxpayers incorrectly reporting their Capital Gain information
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